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10-17-2018, 07:44 PM
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#21
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 38,007
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Quote:
Originally Posted by MRG
+1
It's a ripoff. There was valid a reason for it in 1993. Those physical packages were replaced with reusable bits long ago.
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The transaction fee is due to Vanguard not having a No Transaction Fee arrangement with Fidelity as some other higher ER mutual fund companies have. Vanguard doesn't want to push the extra costs of dealing with external brokerages onto their direct clients. It's Vanguard's choice.
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Retired since summer 1999.
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10-17-2018, 07:58 PM
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#22
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Apr 2013
Posts: 11,078
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Quote:
Originally Posted by audreyh1
The transaction fee is due to Vanguard not having a No Transaction Fee arrangement with Fidelity as some other higher ER mutual fund companies have. Vanguard doesn't want to push the extra costs of dealing with external brokerages onto their direct clients. It's Vanguard's choice.
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Indeed, it is a choice. At this point in time the cost is less than a rounding error, but it's a choice.
I understand the Vanguard mentality, they're easily the most cost effective fund organization I've ever been in. Perhaps they're not for everyone but they're the best at what they do for the 80% that fit their model.
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10-17-2018, 08:05 PM
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#23
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 38,007
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Quote:
Originally Posted by MRG
Indeed, it is a choice. At this point in time the cost is less than a rounding error, but it's a choice.
I understand the Vanguard mentality, they're easily the most cost effective fund organization I've ever been in. Perhaps they're not for everyone but they're the best at what they do for the 80% that fit their model.
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The transaction fee for buying a Vanguard Investor class fund through Fidelity is $75. No charge for selling. No access to Admiral class shares either.
That $75 fee is a little too large to consider it a rounding error in comparison to the ultra low ERs of index funds. Maybe if you bought all at once and never rebalanced - but that is not typically how people operate.
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Retired since summer 1999.
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FIDO dropping costs again
10-17-2018, 08:31 PM
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#24
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Recycles dryer sheets
Join Date: Sep 2011
Location: MSP
Posts: 304
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FIDO dropping costs again
Like several here, I have assets with both firms. Each offers certain advantages the other lacks. One disadvantage to Fido, for me anyway, is their ongoing lack of index balanced funds other than FFNOX (Fidelity Four-in-One, 85/15 AA the last I looked) and their target date funds (the index series, that is). Nothing along the lines of Vanguard's Life-Strategy family or Wellesley/Wellington for instance. (Ok, I realize W/W are managed.) And yes, I know...folks can "build" their own from Fido's index funds. But not everyone wants to for various reasons.
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10-17-2018, 08:41 PM
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#25
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Apr 2013
Posts: 11,078
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Quote:
Originally Posted by audreyh1
The transaction fee for buying a Vanguard Investor class fund through Fidelity is $75. No charge for selling. No access to Admiral class shares either.
That $75 fee is a little too large to consider it a rounding error in comparison to the ultra low ERs of index funds. Maybe if you bought all at once and never rebalanced - but that is not typically how people operate.
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Sorry we're not talking about the same thing in regard to rounding. The fee that should be passed on is about .002 cents. The fact they charge $75 is a business decision on the part of the fund company.
At one time the fee made sense. After certain technology was developed, it is a ripoff(think I'm repeating myself).
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10-17-2018, 08:44 PM
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#26
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 38,007
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Quote:
Originally Posted by MRG
Sorry we're not talking about the same thing in regard to rounding. The fee that should be passed on is about .002 cents. The fact they charge $75 is a business decision on the part of the fund company.
At one time the fee made sense. After certain technology was developed, it is a ripoff(think I'm repeating myself).
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Vanguard clearly wants you to buy their funds directly.
__________________
Retired since summer 1999.
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10-17-2018, 09:13 PM
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#27
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Thinks s/he gets paid by the post
Join Date: Jun 2016
Posts: 4,661
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Quote:
Originally Posted by audreyh1
Vanguard clearly wants you to buy their funds directly.
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I buy ETF’s rather than funds so wasn’t aware of this. The VG ETF’s cost $4.95 to buy. That’s the rounding error I was referring to.
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10-18-2018, 07:08 AM
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#28
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Thinks s/he gets paid by the post
Join Date: Jul 2012
Location: Texas
Posts: 3,024
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Quote:
Originally Posted by Scuba
...Best of both worlds is VG funds or ETF’s within a Fido account. All the perks of Fido’s superior service with the lower costs/marginally better performance of VG products.
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Quote:
Originally Posted by audreyh1
High transaction fees messes that up.
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In fairness, Scuba said "VG funds or ETFs." Your statement is only true for mutual funds.
We own Vanguard and iShares ETFs at Fidelity. Best of both worlds, as Scuba said. They are all ultra-low ER index funds. I make 2-3 trades per year on average, usually for some combination of rebalancing, tax loss harvesting, and HSA contribution. iShares ETFs trade for free, while Vanguard is $4.95. So my average annual commission cost is about the same as a cup of coffee at Starbucks. Very small price for access to the excellent tools and service that Fidelity offers.
__________________
Retired at 52 in July 2013. On to better things...
AA: 85/15 WR: 2.7% SI: 2 pensions, SS later
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